If the Current Short-Run Equilibrium Level of Output Is Greater

question 111

Multiple Choice

If the current short-run equilibrium level of output is greater than full-employment output,we can then expect that in the long run the

• A) price level will rise and short-run aggregate supply will fall.
• B) price level will rise and aggregate demand will fall.
• C) price level will fall and short-run aggregate supply will rise.
• D) price level will fall and aggregate demand will rise.
• E) long-run aggregate supply will increase.

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Definitions:

Investment Opportunity

An asset or item that can potentially generate a significant return or profit through appreciation, dividends, or interest.

Operations

The day-to-day activities involved in running a business, focusing on producing goods and services efficiently and effectively.

Variable Maintenance Costs

These are expenses that fluctuate in direct proportion to the level of activity or production, such as the costs of repairing machinery which increase with more intensive use.

Equipment Services Department

A division within an organization responsible for maintaining, repairing, and ensuring the operational efficiency of machinery and equipment.